Moody’s reviews Outerwall

Moody's Investors Service said it placed Outerwall Inc.'s Ba3 corporate family rating, Ba3-PD probability of default rating and the B1 senior unsecured note ratings on review for downgrade.

The review follows the company's announcement that it entered into an agreement with affiliates of certain funds managed by affiliates of Apollo Global Management, LLC, pursuant to which Apollo will acquire Outerwall in an all-cash transaction, valued at about $1.6 billion (including net debt). Apollo will pay $52 per share in cash for each outstanding share of Outerwall, which represents a premium of around 11% relative to the company's last closing price. Following completion of the transaction, Outerwall will become a privately held company.

The outlook was changed to under review for downgrade from negative.

Moody’s said the review for downgrade is based on its expectation that the proposed private equity transaction, which it believes will be financed with higher debt levels, will lead to an increase in the company's debt-to-EBITDA beyond the 2.25 times range expected for the current Ba3 corporate family rating.

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